World oil stocks are taking a major hit on Monday following the failure of crude-producing countries to agree on production cuts after Russia refused to go along with Saudi Arabia’s oil reduction plan. The shock to oil stocks rattled financial markets, causing the Dow to drop more than 1700 points, causing a brief halt when the massive sell-off triggered a safety feature. Trading has since resumed. RT’s Donald Courter has more on the oil price war between Russia and Saudi Arabia.

The economic consequences of the coronavirus epidemic have sparked a conflict among major oil-producing nations. Last week, oil producers were unable to agree on a reduction in production volumes, resulting in a price war between OPEC and Russia. That has sent oil prices plummeting. The price of oil collapsed by 31.5 percent at the start of trading, the lowest price since January 1991. As a reaction, stock markets fell sharply this Monday: In Tokyo, the Nikkei Index lost more than 5 percent, while the Hang Seng in Hong Kong fell almost 4 percent. Australia’s ASX Index fell particularly hard with a minus of 7.3 percent and in Germany, the DAX tumbled almost 8 percent at the start of trading. The picture around the Gulf is even more dramatic – markets have shed up to around 10% there.

Oil war that began today will bankrupt many US companies. 60% of stocks in Russell 2000 are lower now than when Donald “the stock market president” Trump took office. Financials continue to get clobbered and stimulus won’t help them this time. This time nobody will believe QE is temporary or interest rates will normalize. Australia looking to repeat the mistakes of others central banks.

Gold broke $1700 today, but didn’t break out. All the babies were thrown out with all the bathwater, including gold mining stocks. Gold price much stronger during this crisis than in 2008. In contrast, the dollar is now falling against other currencies. Massive swings in the currency markets leaving the dollar crumbling against other major safe-haven currencies, unlike in 2008 when that crisis sent the dollar soaring. Gold has much less ground to recover now so if it reacts the way it did after the fed’s last bailout, it has a lot more upside ahead.

Perfect conditions for a bitcoin rally, yet it’s collapsing as it fails to live up to hype and people realize it’s nothing more than digital risk. CNBC suddenly and conveniently seems to have forgotten the word “bitcoin.” Phenomenal opportunity to dump bitcoin and buy gold before the bottom really drops out on bitcoin.

26 Reacties op “Het Coronavirus en de val van de olieprijs”

The catastrophic situation in the oil market occurred as major producers failed to agree on new output cuts at the end of last week, as Russia refused to back deeper reductions and suggested prolonging the existing ones. With no new steps agreed on, the current deal expires on April 1, freeing all the parties of the accord to open the taps and extending the supply glut, while one of the main importers of oil, China, is still battling with the coronavirus outbreak.

Russia’s refusal to support additional cuts apparently angered Saudi Arabia, which has been pushing the measure. The kingdom announced that it would slash prices for its buyers and is expected to boost production by as much of as 2 million barrels per day.

Decline in demand for oil due to the coronavirus epidemic, further reinforced by the demise of the OPEC+ production cuts agreement, has crashed the US and world markets, sending traders into a panic-selling mode. The ongoing market turmoil will certainly hit the oil industry heavily, but the impact is likely to reach far beyond it, CEO and chief global strategist at Euro Pacific Capital Peter Schiff believes.

OPEC+ is no more, after a torrid 24 hours in which Russia overturned the balance of power in the oil world, leaving the members of OPEC+ dazed and confused, shocking Saudi which now faces social unrest with the price of oil far below Riyadh’s budget, and – in a repeat of the Thanksgiving 2014 OPEC massacre – sending oil prices plunging by the most since the financial crisis.

And now, Bloomberg has the stunning backstory behind Friday’s announcement that Russia is quitting its output deal with OPEC and its allies, after last week’s Vienna summit meant to back a proposal by oil producers to cut output collapsed, causing a 10% plunge in oil prices, with some markets seeing their biggest one-day falls since the financial crisis.

Like anti-semitism, Mettan writes, “Russophobia is a way of turning specific pseudo-facts into essential one-dimensional values, barbarity, despotism, and expansionism in the Russian case in order to justify stigmatization and ostracism.”

The origins of Russophobic discourse date back to a schism in the Church during the Middle Ages when Charlemagne was crowned emperor of the Roman empire and modified the Christian liturgy to introduce reforms execrated by the Eastern Orthodox Churches of the Byzantine empire.

Mettan writes that “the Europe of Charlemagne and of the year 1000 was in need of a foil in the East to rebuild herself, just as the Europe of the 2000s needs Russia to consolidate her union.”

Before the schism, European rulers had no negative opinions of Russia. When Capetian King Henri I found himself a widower, he turned towards the prestigious Kiev kingdom two thousand miles away and married Vladimir’s granddaughter, Princess Ann.

A main goal of the new liturgy adopted by Charlemagne was to undermine any Byzantine influence in Italy and Western Europe. Over the next century, the schism evolved from a religious into a political one.

They have not heard that the U.S. military is sending 20,000 soldiers from the U.S. to Europe to join 9,000 U.S. troops already in Europe and 8,000 soldiers from ten European countries to practice waging a war against Russia. 37,000 military from the U.S. and Europe will be a part of the war maneuvers named Defender 2020.

The U.S. political environment is so confused that many in the U.S. will question why the U.S. is having provocative actions against Russia such as these big war games on the border of Russia when U.S. President Donald Trump seems to be such a good friend with Russian President Vladimir Putin.

Whatever has occurred inside China at this point it is almost impossible to say owing to conflicting reactions of the Beijing authorities and several changes in ways of counting COVID-19 cases. The question now is how the relevant authorities in the West will use this crisis. Here it is useful to go back to a highly relevant report published a decade ago by the Rockefeller Foundation, one of the world’s leading backers of eugenics, and creators of GMO among other things.

The report in question has the bland title, “Scenarios for the Future of Technology and International Development.” It was published in May 2010 in cooperation with the Global Business Network of futurologist Peter Schwartz. The report contains various futurist scenarios developed by Schwartz and company. One scenario carries the intriguing title, “LOCK STEP: A world of tighter top-down government control and more authoritarian leadership, with limited innovation and growing citizen pushback.” Here it gets interesting as in what some term predictive programming.

New “sub-prime” bubbles have been created in the Corporate Debt sector which has risen to over $13.8 trillion (up 16% from the year earlier). A quarter of which is considered junk, and another half graded at BB by Moodies (a step above junk).

Household debt, student and auto debt has skyrocketed and since wages have not kept up with inflation causing even more unpayable debts have been incurred in desperation. Industrial jobs have collapsed consistently since 1971, and low paying service jobs have taken over like a plague.

The last report from the American Society of Civil Engineers concluded that America desperately needs to spend $4.5 trillion just to bring its decayed infrastructure up to safety levels. Roads, bridges, rail, dams, airports, schools all received near failing grades with the average age of Dams clocking in at 56 years, and many water pipes over 100 years old, and transmission/distribution lines are well over 60 years. The factories which once supplied those infrastructure needs are long outsourced, and much of the productive workforce that had that living knowledge to build a nation are retired or dead leaving a deadly generation knowledge gap in its place filled with millennials who never knew what a productive economy looked like (and aging baby boomers who have tried hard to forget what it was).

American farmers have probably been the most devastated in all this with dramatic population losses across the entire farm belt of America and the average age of farmers now 60 years. It was recently reported that 82% of U.S. Agricultural family income comes from off farms, as mega cartels have taken over all aspects of farming (from equipment/supplies, packaging and the even the actual farming in between).

President Trump and other sane patriots from both parties of America would then have to figure out how to start the long but vital process of forcing credit to regenerate the destroyed productive base of America and Europe with a focus on advanced infrastructure, science and technological progress. This later investment into space science, atomic power, and transportation (high speed and magnetic levitation) would drive new breakthroughs necessary to overcome the current “limits to growth” that Green New Dealing oligarchs believe justify reducing the world population to less than two billion. Where Franklin Roosevelt had to drive this process solo in the 1930s, today’s America luckily has a China-Russia alliance that have created a powerful “New Deal” of win-win cooperation in the form of the evolving Belt and Road Initiative with invitations for western nations to jump on board.

Saudi Arabia launched an all-out oil war offering unprecedented discounts and flooding the market in an attempt to capture a larger share and defeat other oil producers. This “scorched earth” approach caused the biggest oil price fall since the war in the Persian Gulf in 1991.

It all began on March 8 when Riyadh cut its April pricing for crude sales to Asia by $4-$6 a barrel and to the U.S. by $7 a barrel. The Kingdom expanded the discount for its flagship Arab Light crude to refiners in northwest Europe by $8 a barrel offering it at $10.25 a barrel under the Brent benchmark. In comparison, Russia’s Urals crude trades at a discount of about $2 a barrel under Brent. These actions became an attack at the ability of Russia to sell crude in Europe. The Russian ruble immediately plummeted almost 10% falling to its lowest level in more than four years.

Another side that suffered from Saudi actions is Iran. The Islamic country is facing a strong US sanctions pressure and often selling its oil via complex schemes and with notable discounts already.

Oil crashes, stock market crashes, DISCOVER INTEL YOU NEED TO KNOW! This is a time in history we’ll remember forever. Could this be the catalyst to the credit markets freezing? Could it be worse than 2008? The markets are collapsing but if you were paying attention you would’ve seen all this coming. It was only a matter of time before the Fed induced asset bubbles would have to come crashing down. But does the fact oil prices collapsed and the stock market is in the process of collapsing mean we’ll have a recession? And if we do, how does it affect the corporate bond market, or the credit markets in general. What does the end game look like and how do we prepare? Most people are choosing to bury their heads in the sand and “buy the dip.” This is the wrong approach to say the least, those who choose to buy the dip now could learn the hard way, markets don’t always go up over time.

The wild times continue for global markets as uncertainty reigns supreme. In this clip, we get an expert take on the impact that both the virus and oil have played in the volatility with Richard Wolff, host of Economic Update.

With the coronavirus now officially declared a pandemic, the world faces the additional burden of an oil market collapse. This comes at a time when demand for crude was already low. Some are calling this the ultimate perfect storm. How this all ends is anybody’s guess.

In this final episode of the Keiser Report from Los Angeles, Max and Stacy discuss the comment made by Roy Sebag of GoldMoney.com that the start of the oil price war by Saudi Arabia marks the end of the petrodollar system. In the second half, Max interviews Mitch Feierstein of PlanetPonzi.com to discuss how the Fed tried to taper a ponzi scheme and failed. With markets now being hit by extreme volatility, Feierstein forecasts what to look out for in global equity markets, as debt unwinds and panic sets in.

Trump’s order will see the US snap up a bargain, as crude oil prices have just suffered their worst week since 2008, dropping to around $30 per barrel. The drop was caused by reduced demand due to the coronavirus panic, and an ongoing price war between Russia and Saudi Arabia, neither of whom have cut output to match the reduced demand.

By stocking up the reserves, Trump can protect US energy companies from potential coronavirus-related disruptions to supply, or release more oil to insulate the market against price shocks once demand rebounds.

The decision to “fill it right to the top” comes after a group of oil lobbyists met with the president on Wednesday, urging him to capitalize on the downturn and snap up cheap crude oil during the dip.

The world should be mailing thank-you letters to Moscow right about now

$30 dollar oil will be great for the global economy (and in turn, a good global economy is good for oil). At a time when the global economy is visibly losing steam, when we’re overdue for another business cycle recession, and when nobody seems to have an answer, Moscow delivered what nobody else could — a massive economic boost for the whole world.
Sure there will be losers, chief among them US shale and the Saudis who need far higher prices to make their budgets work.
But then as a whole, the US shale has always been a loss-making enterprise for America. The scaling-down of shale is not bearish for the US at all. It’s bullish. If Putin can make Americans stop throwing more good money down the shale pit that’s not a bad thing, that’s a giant favor to the US and the health of its economy right there.